Opinion: Opportunistic fraud is thorn in sector’s side

In many ways, insurance is very black and white. Each policy will have its own terms and conditions, detailing precise elements of cover, while claims payouts are based on specifically sought after data points and information.

However, one undesirable facet of the market that plays decidedly in the grey is opportunistic fraud – where claims for genuine incidents may be exaggerated or risks misrepresented on policy applications in order for insureds to obtain what they view as more bang for their buck.

The ABI would certainly concur with this view – its statistics published in September 2024 found that exaggerated loss was the most common type of fraud committed in 2023, with 25,700 of these claims recorded, amounting to £407m.

Meanwhile, Scott Clayton, head of claims fraud at Zurich, confirmed that at least 80% of the cases his team handles relate to opportunistic fraud, with accidental loss, accidental damage, theft or escape of water claims being commonly exaggerated, as well as slips and trips.

Manjit Rana, executive vice-president for insurance at voice analytics firm Clearspeed, told me over a recent coffee meeting that UK general insurance was much more geared up to tackle criminal or organised fraud, with opportunistic fraud posing more of a challenge.

In conversation at March 2025’s Fraud Charter roundtable, Simon Mattless, counter fraud lead at Aviva, added that detecting opportunistic fraud was not the primary challenge, however – the issue lies in how to handle this type of fraud as it typically has its foundations in a genuine claim or situation. He questioned how the Financial Ombudsman Service, for example, would view legitimate claim elements that remained unpaid.

Percayso Inform managing director Richard Tomlinson agreed. He told me: “Opportunistic fraud often exists in a grey area and can be harder to spot as elements of truth combine with subtle manipulations or exaggerations. The number of cases is almost certainly higher than outright planned criminal activity.”

In his field of motor data enrichment, for example, he has seen “many” situations where potential policyholders will tweak up to 10 factors – such as vehicle modifications or postcode – more than five times each over the course of a day in a bid to engineer a cheaper car insurance premium.

In terms of tackling opportunistic fraud, Tomlinson noted that early checks – such as credit or fraud database checks – can be beneficial, as well as “piecing together the bigger picture”. For example, “instances of someone attempting to sell their car and reducing the price multiple times, followed by an insurance claim, is a good candidate for further investigation”.

Clayton added that Zurich UK has partnered with decision intelligence platform Quantexa, which will be rolled out this autumn, partly to combat opportunistic fraud.

However, tackling opportunistic fraud can still involve a bit of trial and error. At the aforementioned Fraud Charter gathering, Nik Jethwa, detective chief inspector at the City of London Police’s Insurance Fraud Enforcement Department, noted that cease and desist notices are used in both opportunistic and criminal fraud cases. But Paul Holmes, partner at DWF Law, questioned the effectiveness of this method considering that opportunistic fraud is usually more spontaneous.

Delegates suggested solutions such as firmer enforcement – such as seizing assets and police presence at homes – and more visible education.

Although many outside the insurance sector maybe do not understand the cost implication on premiums of fraud detection and mitigation, David Phillips, claims validation technical manager at NFU Mutual, has the right of it when he said the insurance industry must make itself “toxic for those who want to commit fraud” – this is applicable regardless of fraud’s guise.